Daily Tax Update - July 26, 2016: FASB Issues Proposed Improvements to Disclosure Requirements for Income Taxes

FASB Issues Proposed Improvements to Disclosure Requirements for Income Taxes:  Today the Financial Accounting Standards Board (FASB) issued a proposed Accounting Standards Update (ASU) intended to enhance disclosure requirements on income taxes.  The proposed ASU would modify existing disclosure requirements and provide additional disclosure requirements for income taxes.  Such modifications and additions include describing an enacted change in tax law, disaggregating certain income tax information between foreign and domestic operations, and explaining the circumstances that caused a change in assertion about the indefinite reinvestment of undistributed foreign earnings.  The proposed ASU would also require disclosing the aggregate cash, cash equivalents, and marketable securities held by foreign subsidiaries. 

Debt-Equity Challenges Under Section 385 Must Be Coordinated With Associate Chief Counsel Offices:  The IRS has revised a chief counsel notice (CC-2016-009) from June 30, indicating that any case in exam or litigation raising an issue under section 385 requires review by an Associate office or the Special Counsel to the National Taxpayer Advocate.  Previously, the IRS required review for issues involving section 385(c), which is limited to whether it is binding when an instrument is characterized as debt at the time of its issuance.  The updated requirements expand the review requirement to issues involving sections 385(a) and (b). 

Global Forum Publishes 10 Peer Review Reports on Movement Toward Tax Transparency:  Today the Global Forum on Transparency and Exchange of Information for Tax Purposes (the Global Forum) published 10 peer review reports demonstrating continuing progress toward implementation of the international standard for exchange of information on request.  The reports allocate ratings for compliance with the individual elements of the international standard, as well as an overall rating for each of the eight jurisdictions undergoing a Phase 2 Review.  Of those eight jurisdictions, Switzerland, Saint Lucia, Albania, Cameroon, Gabon, Pakistan, and Senegal received an overall rating of “Largely Compliant.”  United Arab Emirates was rated “Partially Compliant.” 


Tax Procedure Outline: Audits, Appeals, and Litigation:  The Steptoe Tax Group has updated its comprehensive Tax Procedure Outline: Audits, Appeals, and Litigation.  The outline gives insights and guidance at each step in the tax controversy process.